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Labor and Employment

The diversity of the socio-economic conditions of the Arab region is greatly reflected in the dynamics of its labor market. Demographic parameters and natural resources affect labor force, employment opportunities, and income levels of residents. Moreover, this region includes states affected by violent crises and conflicts; such as Iraq, Syria, Yemen, Libya, Somalia, and Palestine. Despite these differences, the Arab countries share common labor market features and face similar challenges.

Labor force participation rate in the region is the lowest worldwide at 48.6% in 2017, mostly due to the low participation rates of women. This rate is the lowest in conflict-inflicted countries such as Yemen (37.9%) and Syria (41.1%). The labor force participation rate is the highest in the GCC countries, reaching 86.9% and 79.7% in Qatar and the United Arab Emirates respectively and 72.2% in Bahrain in 2017. [1] This is explained by the fact that these countries are labor importers, so labor force participation rates include the foreign labor force that participates in the labor market.

There is a wide mismatch between labor supply and labor demand resulting in high unemployment rates in many countries, especially among young men and women. And this mismatch is largely the result of the structure of the economy in most countries, whereby it’s locked into low value-added activities. The unemployment rate in the Arab region registered 10.2% in 2017 [1] compared to 5.7% worldwide. Palestine suffers from the highest unemployment rate at 27.9% in 2017. On the other hand, GCC countries except for Oman (unemployment rate 16%) have very low unemployment rates with the lowest rate in Qatar at 0.2%. [2] 60% of the population in the Arab region consists of young people under the age of 30. [3] The lack of job creation and the mismatch between the highly educated new entrants into the labor market and the market needs has led to high youth unemployment especially among women and the more educated. Youth unemployment rate in the region registered 26.7% in 2017, [1] reaching the highest in Oman (48.2%) and Libya (46%) and the lowest in Qatar (0.5%). [2]

Women in the Arab region face a higher risk of unemployment and they still face high barriers to entry into the labor market. The female unemployment rate has decreased over the last 17 years from 20.1% in 2000 to 18.2% in 2017 but is still very high compared to men’s unemployment rate of 8.1% [1] and to a world average of 6.1%. [2] Female youth unemployment rate registered a high 37.8% in 2017. [1] Cultural and social norms, as well as, structural obstacles limit women’s participation in the labor market. One example is married women who face employment discrimination since social benefits like maternity leave and child care are considered costly and thus reduce their chances of being accepted for a job.

This overview has been drafted by the ADP team based on most available data as of 26 February 2018.

Data Highlighted

Labor force participation rate in the region is the lowest worldwide at 49.8% in 2015, mostly due to the low participation rates of women. This rate is the lowest in conflict-inflicted countries such as Palestine (43.7%), Iraq (42.4%), and Syria (41.7%).

Publications

The objective of the paper is to draw a sketch of the population and migration dynamics of the United Arab Emirates (UAE), using the data available from federal and emirate-level statistical bureaus. In 2016, the total population of the UAE was estimated to be 9,121,...Read More

In a landmark decision by Saudi King Salman bin Abdul Aziz Al Saud on September 26, 2017, a decree was issued allowing Saudi women to drive motor vehicles. In this short paper, we reflect on the possible impact of this decision on future domestic workers’ immigration...Read More

This country brief looks at gender and youth dimensions of employment in Jordan, paying particular attention to the rural economy. Youth unemployment is an issue of major concern in Jordan, impacting on the country’s ability to achieve many of its Sustainable...Read More

This Report examines the related issues of child labour and youth marginalisation in the Arab States. It focuses in particular in Iraq, Jordan, Lebanon, Yemen and the Occupied Palestinian Territory. All are conflict or conflict-affected societies where concerns...Read More